Greetings friends! And damn did I get seriously sidetracked on the way to Siberia! Sorry for the extended blog departure, but I had an unexpected mission come up which involved 16 vestal virgins, 10 cases of Jägermeister, a cache of AK-47’s, a warm pretzel eating contest, and Angela Merkel. I know: it sounds complicated, and I cannot divest any of the details at the present time…mostly because I can’t remember many of them. But I’m back in fine form once again, and I woke up woozy in Uzbekistan just in time to tap into a tipple here in Tashkent….and catch the end of the SCO meeting. A meeting which continued to reaffirm my belief that Russia and China are becoming the best-est of buddies, much to the chagrin of ‘the West.’ Dig it:

Russian lovefest to the East…

Russian, Chinese PMs meet Central Asian allies

Premiers of SCO vow to enhance cooperation

Chinese premier: China-Russia relations at most important stage

Russian deputy PM hails Russian-Chinese theme years

Russian dissing to the West…

U.S. pushes to get Russia on its side

US disappointed in China, Russia response on Iran sanctions

Russia-EU Summit: A Nice Gathering with Few Results

Have a glass of vodka with your Moo Goo Gai Pan. Or a caviar filled egg-roll. ‘Cause that is the international cuisine paring of the future man! So what’s this all about? Well, in a nutshell, Russia and China are grooving to a mutual lovefest which is resulting in an undeclared new axis of power in the world….one that has serious repercussions for ‘Team West.’ All I know is, someone is going to lose their virginity on this one….and it is likely to be the US that gets screwed. Now before any of you start digging the hole for the underground bunker in your backyard in preparations for World War 3….just relax and hold on a minute. I’m not talking about open armed conflict, or even a return to a Cold War scenario. It’s much more subtle and simple than that. It’s more like this:

Russia and China’s new and strengthening alignment will be a source of friction and frustration for most US foreign policy in the coming decade. And beyond. One needs only look as far as the current story above which references Russia and China’s open willingness to block any US proposals on sanctions of Iran at the UN Permanent Security Council. But I am perhaps getting ahead of myself as usual…how did we get to this point?

Way back in 1991 when the USSR officially collapsed and ceased to exist, Russia was a complete basketcase of a country politically, economically, socially, and psychologically. They were losers with a capital LOSE. Communism had failed, they had lost the Cold War of ideology, they were bankrupt, and completely lost in the sauce on how to go forward. Throughout the 1990’s, Russia was the scene of a veritable ‘wild west’ of capitalism and democratic transition—meaning that there were no rules, largely unregulated privatization, and no boundaries for how the country underwent this massive transition from commie to capitalist/democratic.

The US and ‘Team West’ did try to help out as best as they could….while still maintaining their strategic edge (meaning they helped out as long as the relationship still tilted in their direction.) Team West encouraged privatization and opening markets as the ‘tough love’ route that had to be taken for Russia to go forward. While democracy did get advanced in this era, the market capitalism transition left most in the gutter with a bad taste in their mouth—a situation usually reserved for cheap vodka consumption on Friday nights. By 2000, the place was still awash in corruption, organized crime, endemic poverty, and a sense of national hopelessness that relegated the state to the history books.

By my how times change. Enter two factors into this Russian equation: Putin and petroleum. Vlad ‘the Man’ took over in 2000, roughly the exact same that oil prices began to rise…and they have been steadily rising ever since! Putin’s strong-arm tactics to clamp down on crime and chaos in the markets, coupled with his strong sense of nationalism, have given the Russian’s a source of pride that they haven’t known since the Sputnik satellite launch. And since Russia controls shit-tons of oil and natural gas, they have been getting exceptionally rich in the last seven years too. Sum up these factors and you get this: Russia is back, bee-yatch!

Massive sales of oil and natural gas have allowed the Ruskies to pay off their national debt. Like all of it. They don’t owe anybody a damn dime. Putin has also been very savvy about socking away a lot of that oil wealth for a rainy day. And he has been storing it legally in banks for future use of the state, as opposed to storing it in his private bank account, which of course is the type of corruption that happens all the time in lesser developed places with less of a sense of national pride. I’m telling you, this national pride shit has a lot to do with the current Russian success story…and Putin’s whack-crazy approval ratings too, which hover in the 80 to 90% range. Damn! G.W. would give his left nut for an 80% approval rating! But I digress…

Back to the stories above: The US and Team West have been assuming since 1991 that Russia would eventually join their team. I mean, their teams have so much in common already in terms of culture, religion, international business, technology and history. And Team West has been actively courting the Russians to side up with the West in terms of the war on terrorism, UN security council resolutions, perhaps even EU membership…and I even remember a time when NATO membership for Russia was a serious talking point.

But a funny thing happened on Russia’s way to joining Team West: they got their Russian groove back. They got an economy back. They got a nationalistic pride back. And most importantly, they have their sense of being a world power back. Oops. Looks like Russia is forming their own team again, as opposed to joining Team West. And that is exactly what I’m writing about today. Russia has turned east to embrace China. And embrace its former Central Asian possession of the –stan countries, and yes, even embrace Iran. The East is (at least for the time being) Russia’s focus for the future.

As the US and Western Europe continue to attempt to sweet talk the Russians, they are doing so with increasingly less and less bait to attract their former Cold War adversaries. And Russia is increasingly holding all the aces in this poker match. And Russia knows it. Thus, they are playing their hands on foreign policy from a position of power. The Ruskies are now in a position to play off all the other powers at their own whim, seeking out the most advantageous situations for themselves, with extremely limited repercussions from the US, Team West, or really anybody else. Meaning, they simply cannot lose anymore. What do I mean they can’t lose?

Well, let’s summarize on just a few of the points mentioned in the stories above:

Economically, if we go no further than to consider the role of oil and natural gas, then Russia is in the catbird’s seat for at least another decade…or ten. Russia supplies at least 1/3 of Europe’s energy needs. That’s Western and Eastern Europe. And it’s not just about the money being made either: tremendous political power has now been bestowed on Russia since those European powers get so much of their energy from the Bear. Translation: if you piss off Russia, you may get your heating oil turned off…in January. Think I’m making this shit up? Ask Belarus and Poland how fictional that story is. Then ask them how cold it gets in January.

But wait! Its not just Europe. China is energy hungry too, and the Russians are now establishing all kinds of relationships to transport more oil and natural gas then ever to their new Chinese friends. As China continues to explode economically, Russia will continue to get rich exponentially since they will be supplying the energy for this growth. Whoops! I almost forgot Japan! Japan wants as much Russian oil as it can get too, so there will never be any shortage of demand for Ruskies petroleum products in the East. Which means of course that Russia can play both sides of the continent against each other to jack up demand…and prices!

For now, the Chinese are winning this petroleum pissing match, as the Russians continue to forge new ties, build new pipelines, and sign new contracts with their eastern friends…but openly dissed the meeting with EU countries last week as ‘a waste of time.’

Strategically, Russia has also been busy strengthening its hand in the SCO. Big time. Don’t know your SCO? Better dig this then: You Gotsta’ Know the SCO!!! Within the SCO framework, China and Russia have basically been conducting an orgy of trade agreements, energy security agreements, economic and infrastructure projects and even military exercise co-ordination. They haven’t been doing any of that shit with Team West! And here’s why: as a member of the SCO, Russia is a leader. As a member of the EU or NATO, Russia is a follower. Got it? The Russians do, and they dig it.

Finally, politically the Russians and Chinese are in bed together like never before…mostly in the sense that they are now openly countering US foreign policies on the world stage. Putin’s position of power affords him the ability to completely piss off the West…‘cause he can always just chill with the Chinese chaps. This has come into play in current events in several ways:

1) Putin has been openly critical of the US plan to put a ‘missile shield’ in Eastern Europe. So critical in fact, that he is saying that this shield will cause another Cold War, and the Russians have pulled out of treaties which have limited the production of certain types of missiles. Putin has also overseen the resumption of old Cold War bomber patrols across Russian territory, as well as the creation and testing of a ‘super-bomb.’ He is causing such a ruckus over the planned missile defense systems, that he now almost literally has the US kissing his ass and begging him to allow the plan to go through. It is interesting to note that the two sites which will house this defense system are Poland and the Czech Republic: two countries which are heavily reliant on Russian fuel to get thru the long winter. Starting to get the picture here of how this shit is working?

2) Iran. Iran’s continued foray into developing a nuclear industry (and perhaps a nuclear bomb) has pitted the Russian-Chinese axis against Team West. Putin has cozied up to Iran if for no other reason than to check-and checkmate with the US on foreign policy issues. Nobody really thinks that Putin has a lovefest with Iran, but he is in a position to counter any moves towards US sanctions or even an US invasion of Iran should it come down to that. Again, start to put the pieces of the puzzle together: if the US continues to make moves towards the missile defense shield…then Russia will strengthen its support for an Iranian nuke industry. If the US/Team West pisses off Russia about anything, then Russia will use its veto power on the UN Permanent Security Council to stop any international action dead in its tracks. Both Russia and China are now dropping hints that they are prepared to do just that.

3) The SCO is continuing to grow in functionality and membership. It is starting to look a lot like a combo NATO/EU of the east…with Russia as a real leader. And watch out for this big bombshell to be dropped in the near future: Russia is going to lead the formation of a natural gas cartel of Asia, with themselves in the center. Quote from SCO meeting on Friday: “Russia has also proposed the establishment of an “energy club” to complement the SCO regional security bloc, said Ivan Materov, Russian deputy minister of industry and energy.” The Plaid Avenger sez: Watch out OPEC, here comes ‘SCO’-PEC! Man! That will be some serious shit hitting the fan!

But enough speculation and assessment for now. Just know this: Russia is turning east to be a leader, and away from the west where it would be conscripted to be a follower. It’s not really surprising I suppose. I think its more the speed at which Russia has gone from being a zero to be a hero…or at least to being a major force in the world again. But all this talk of Russia has built my thirst and whetted my appetite. I think its time for a few dozen Oysters shooters, Moscow-style. What? Never had it? Dig:

Moscow Oyster Shooters, Plaid Avenger recipe:

• 3 dozen Pacific Oysters on the half-shell
• Add a small dollop of horseradish sauce in middle of oyster
• A teaspoon of Beluga caviar on top of dollop
• Pour over one shot of Stolichnaya Red Russian vodka
• Squeeze lemon wedge over entire batch
• Go to work

Oh hell yeah!

Dude! Did someone forget to pay the cable bill at the White House? Because I don’t think that they are getting CNN anymore, much less any other news network that deals with issues outside the US!

Salutations my sexy and sultry friends! The Plaid Avenger is back is rare form, to the great consternation of the Cheney administration in the US. While I typically try not to dabble in doltish domestic drivel, I’ve heard enough irreverent and irrational interpretations of international intrigue from this administration to last an infinity. Ha! That’s a lot of ‘I’s my friends! And since the US is definitely the 800 pound gorilla of international politics, it is worthy enough to talk about the current comments of the Cheney corporation…and more importantly why their statements are strange…and sketch. Check it:

Bush warns world of WWIII over Iran

George Bush warns Putin over ‘World War III’

Cheney - No nuclear arms for Iran

Cheney, Like President, Has a Warning for Iran

Cheney raises anti-Iran rhetoric

So what am I ranting about here? Let’s get the sentiment of this blog straight from the start: the Avenger is only concerned with the ridiculous rhetoric coming from the Bush Administration about their ‘world support’ against the Iranian regime. I’m not going to get into the debate about whether or not the Iranians are trying to build a nuclear bomb (they are not…yet). I’m not getting into the particulars about whether or not they support terrorism in the Middle East (they do). I’m not even going to get into whether or not Iran has evil intentions or should be sanctioned or even should be bombed. What I do want to chat about is who exactly would be supporting any of these movements against Iran—which is the focus of this forum….

Now, apparently the US administration is employing some good old boy, old-school, pre-WWII tactics of full-on propaganda in order to scare the living shit out of folks enough to get them riled up to demand that action be taken against the Iranians. I mean, if the whole world is against the Iranians, shouldn’t we do something about it? Um….that’s just the problem…the whole world is definitely not on board with US foreign policy on this matter, and to announce that the US is going to lead a willing world to destroy Iran is not just misleading…its simply wrong. But I want you folks to be smarter than the average bear…and in this case, ‘bear’ is an appropriate animal description, as the Russian Bear has everything to do with this equation.

But I am getting ahead of myself as usual. Let’s get to the facts…I don’t think I need to elaborate much on the Iranian/US situation happening on the planet right now. In a nutshell: Iran is developing a nuclear power industry; no one is disputing that fact. The US and some Western European states are utterly convinced that Iran is developing this knowledge in order to ultimately build nuclear weapons. Iran claims that it only wants the nuclear power, and has a right to do this based on the NPT treaty (which is true).

The US in particular refutes this claim, and there are widespread accusations in the US which allude to ‘flagrant’ misdeeds of Iran developing a secret nuke bomb—although to my knowledge, no proof of Iranian wrong-doing has ever been presented to the IAEA. In other words, the US and its allies insist that everybody in the world knows Iran is doing all this bad stuff…even though no one has actually got any proof of any of this bad stuff. You starting to get the picture here?

Well the picture got fuzzier after Vlad ‘the Man’ Putin visited Iran last week and declared that Russia does not believe threat Iran is doing anything illegal. As you know from a previous blog (World Pissing Match: Russia Pisses Off US;), Russia also went as far as to set up a ‘no-attack-Iran’ zone with all the countries which surround the Caspian Sea. ‘The Bear’ is making no bones about its position with Iran—a position which runs exactly opposite to the US one.

And that brings us back to point: Last Friday US President Bush made a speech in which he said that Iran’s obtaining of a nuclear weapon would start ‘World War Three.” Wow! That is some serious shit to be spouting! Not to be outdone, US Vice-President Dick Cheney went on the attack just yesterday by saying that under no circumstances would the US and the world at large allow Iran to get a nuclear bomb…which in this case also means developing nuclear power. He hinted that ‘the world’ would not allow this, and that there would be serious repercussions on Iran if they continued down this path.

Just a couple of quotes:

President Bush: “My intent is to continue(?) to rally the world, to send a focused signal to the Iranian government that we will continue to work to isolate you…” (my italics…and ‘continue to rally the world’? ‘Continue’? When did it start?)

Vice President Cheney: “The Iranian regime needs to know that if it stays on its present course, the international community is prepared to impose serious consequences,” Mr. Cheney said, without specifying what those might be. “The United States joins other nations in sending a clear message: We will not allow Iran to have a nuclear weapon.” (my italics)

The international community is prepared to impose serious consequences? The US is rallying the world? Hmmmm….. I do have to wonder…..Where are these guys getting their information from? I mean, they are the damn White House for pete’s sake! They have the CIA, the FBI, the NSA, foreign ambassadors, think tanks, chiefs of staff and a shitload of other folks whose jobs are to keep the Executive Branch well informed. So how are these guys making such clueless comments? I’m just a dude reading the newspapers and can point out a few holes in their thinking about international support against Iran. Here we go:

1) Russia: Hey guys! Check the papers from last week! Russia just announced that they don’t think Iran is doing anything illegal. AND they said that they would not be supporting any more tougher UN-imposed sanctions on Iran. How can Russian make such a bold assertion? Duh? Russia has a permanent seat on the UN Permanent Security Council. As such, it has veto power over any UN sanctions against Iran.

Hello? McFly? McCheney? Do you know how the UN works? Check out a previous blog if you are still confused (Permanent Possessors of Power: the Fabulous 5!) The deal: Russia will stop cold any UN move against Iran. So you can count Russia out of your ‘international community’ plans…and while we are it at…

2) China: China almost always stays out of internal affairs of other countries unless those countries happen to be directly threatening China itself. And that is not the case here either. Remember, China is the #1 fan of sovereignty on the planet, and as such will say that Iran has a right as a sovereign state to develop nuclear energy until it is proven that they are doing something else. On top of that, China is always wimpy to stand alone at the UN…but since Russia has already ponied up and said it will block any UN measures against Iran, China will now do it too. So count China out of the ‘world standing against Iran’….but wait! There’s more!

3) Latin America: Venezuela? Forget about it! Hugo Chavez loves Iran, as does Bolivia’s leader. And since most of Latin America now swings to the left side of the socialist spectrum (and because US-Latin American relations have sucked for a decade), the US should not be looking south of its borders for too much support of an Iranian intervention. In fact, almost all countries south of Mexico will probably openly oppose any such move…since most already did oppose the US invasion of Iraq. Oh! And speaking of Iraq…

4) Iraq: That place is still in bad shape with sectarian violence between Sunni and Shiite…does anybody in Iraq really want an invasion of Shia Iran next door? Talk about dumping gas on the fire! Holy shit! That whole place will explode! Don’t look for Iran’s immediate neighbors to support an invasion or bombing…what a minute…did you say neighbors?

5) Iran’s ‘hood: As suggested above, Iraq cannot be very supportive of a new war next door. But as also referenced earlier, what I refer to as ‘The Caspian Coalition’ has already declared it opposition to any move against Iran. See map for countries who have already agreed to NOT allow any attack on Iran from their territories. And you can extend a bit beyond the Caspian as well…Central Asian countries have been much more keen to party with Russia lately, and have also been having talks with Iran about letting them into their SCO club. (You Gotsta’ Know the SCO!!! ) So count those –stan countries out as well, ‘cause they will side up with the Ruskies on this matter.

Shit. Who does that leave for the “international stand against Iran”? Let’s end the blog on who the US can count on to get their panties in a bunch over Iran: for sure the US can count on their old lapdog the UK for support. Even though Gordon Brown isn’t quite the parlor pooch that Tony Blair was, he will still give his go ahead for actions against Iran.

And France? Hell, France is the new UK when it comes to supporting US foreign policy! Nick Sarkozy is all about kicking some Iranian ass…or at least supporting the US to do it! Germany may be in on this action as well, as they are getting very leery of Iranian power…combined with the quaint fact that they may be within reach of an Iranian missile. Most other European nations, Japan, and even Australia would be on board right this second. But watch out! Australia is holding an election soon, and if John Howard loses, then you can count the Australians out too! Hell, the Labour Party is threatening to pull Aussie troops out of Iraq if they win–no way they are going to support a war with Iran. That is, if they win…which seems probable right now.

Other than that, the US will have a handful of Arab states which may actually support a move against Iran too. Look for Saudi Arabia and Egypt to possibly side up with the US, although in doing so may cause catastrophic public dissent in their countries. Turkey will also probably side up with the US, although if that Armenian genocide bill goes through the US Congress, its anybody’s bet how the Turks will roll.

Needless to say, this idea of an international community rallying around the US to deny Iran nuclear power/nuclear weaponry is a bit of fancy. And the Avenger can’t stand such fluff. Know your world my friends. Know how it works. And know when politicians are blowing smoke up your ass.

Speaking of smoke…time to head to the local hookah bar for some much needed respite from these radical ramblings…

Holy shit! Sorry for the absence my Plaid Friends….but somehow I just woke up in a Toyko back alley, ringside at an illegal sumo competition in which competitors wrestle to the death while simultaneously engaged in an all-you-can-eat sushi showdown. And the fish wraps and fat rolls are flying! Dudes, you do not want to get in-between a sumo and his sushi. What an event! Unfortunately, the last thing I remember was going head to head with Vladimir Putin doing caviar-vodka bombs outside Moscow…but that was about four days ago I think….My, how time flies. However, this is a fortuitous touch down in Toyko, because I have been meaning to introduce you to the newest world leader of note…our main Japanese squeeze, Prime Minister Fukuda:

Japan PM sets out policy agenda

Japan May Cut Support of Afghan Mission

DIAM says new Prime Minister Fukuda positive for Japan

Fukuda Is More Pragmatic Than Former PM

Japan PM Fukuda likely to build on Abe’s Asia policy

Fukuda? Sounds like a Japanese curse word. I love it man! But I’ve heard that you folks are prepping for a mid-term exam, so I’ll keep this rant brief. Yasuo Fukuda is this ancient-ass dude (he’s 71 years old) who just replaced Shinzo Abe as the Prime Minister of Japan. Back up the sake cart for a second. What happened to Abe? You remember me ranting about Abe in the past, yes?

Poor Abe. He had a rough year to say the least. After riding into the Prime Minister position on the coat-tails of his extremely popular predecessor Junichiro Koizumi, ‘Honest’ Abe just kept getting the shit kicked out of him from the word go. His administration was beset by multiple scandals (most of which started before Abe even took office); he took a public pounding for downplaying Japanese war atrocities during WWII (specifically, the use of Korean ‘comfort women’ aka indentured sex slaves); and then his political party got smacked down in the 2007 elections (in which they essentially lost control of the upper house of the Diet—which is the Japanese ‘Congress’).

But the final straw came about a month ago when it became clear that the Diet was not going to pass Abe’s request to continue to use Japanese naval vessels to support the US’s campaign against terrorism in Afghanistan. And Abe just had enough. He threw down the gauntlet and proclaimed that if the Japanese support for the US (a major component of Abe’s foreign policy) was going to be voted down, then he might as well quit, since not shit else was likely to get passed. And that is exactly what he did. Abe bailed. And then he immediately checked into a hospital because he was so stressed out that he was physically falling apart. Damn! Hold it together Abe!

Following Abe’s resignation in September 2007, our new boy Fukuda announced that he would run in the Liberal Democratic Party (LDP) leadership election, which would also determine the prime minister, given the LDP’s majority in the House of Representatives. Just so you know: the LDP would be the equivalent of the Republican Party in the US: a socially and fiscally conservative, center-right political party. And the LDP has been large and in charge of Japanese politics for most of the post-WWII period. Like almost all of it. Almost every Prime Minister has been LDP, and LDP has held the majority seats in the Diet for 50 years too. They have been very popular…which is why their big electoral loss under Shinzo Abe was such a big deal!

So Fukuda won the LDP party leadership, and then instantaneously was formally elected as Japan’s 91st prime minister on September 25. Fukuda and his cabinet were formally sworn in by Emperor Akihito on September 26. Okay, well that’s the basics about how it went down…but who the hell is this dude and what is he likely to be up to in the next year?

Prime Minister Fukuda has inherited the split Congress situation from Abe, but is known to be a dude who can quietly get folks working together—a unifier. He is already distanced from all of Abe’s troubles, so he stands a better chance of getting the government to work with him, and stands a much better chance of getting some of the LDP’s legislation through. But make no bones about it: the Diet is split, so he will have to work hard to get things passed, and many folks in the opposing political party are already promising to make his life suck, just like they did to Abe.

Specifically referenced in a story above, the issue of continued Japanese naval support for the US in Afghanistan still seems destined to fail. Remember: this is the issue that Abe resigned over! And if Fukuda can’t get it passed, then he will have egg on his face too! Why?

Because Japan is a huge US ally, and the LDP leadership in particular are big fans of the Bush administration (both political parties are conservative, right-center). And sending those Japanese troops to help the US in the first place was not only a big sign of support for US foreign policy, but was a huge freakin’ deal in Asia because it was the first time that Japanese troops had been used anywhere outside Japan since WWII! It was a very big deal! To pull back support for the US at this critical stage in those campaigns will be a big loss of face for the US and the Japanese leadership.

FYI: Most Japanese folks did not support the use of their troops abroad, as they interpreted this as counter-intuitive to their pacifist constitution which bans the use of an active military for anything other than self-defense of the island nation itself. The Japanese leadership was compelled to do it anyway as a sign of support for its #1 ally, the US.

On a more positive front, Fukuda will likely continue the work of his predecessor Abe in mending ties with Asia countries, specifically China and the Koreas. There has been bad blood between Japan and all other Asian countries ever since Japan’s imperial takeover started prior to WWII. Japan pretty much owned/controlled Korea and large parts of China and SouthEast Asia, and Japanese war atrocities are still very much remembered in these places. Prime Minister Fukuda will be working hard to remedy this situation.

Plaid Avenger tip: watch for Fukuda to take numerous trips to neighboring Asian countries in an effort to better diplomatic relations—and I’ll bet he does way more Asian partying than any Prime Minister before him. Especially if his domestic agenda gets smacked down by the Diet. When a leader gets stymied at home, the best ones simply go abroad and work on their foreign policy…and he may be old, but Fukuda ain’t no fool.

To finish this rant, allow me to point out a specific policy which demonstrates Fukuda’s much more open policy to dialogue with Asia. One of his most noted policy goals is to end prime ministerial visits to Yasukuni Shrine. [Find out more: Japanese whacko gives Abe the finger…LITERALLY!] In June 2006, Fukuda joined 134 other lawmakers in proposing a secular alternative to the shrine. Why? Because visiting that particular shrine always pisses off Japan’s neighbors, and Fukuda is openly saying: “Hey, we don’t want to piss you guys off! We want to be better friends!”

So know you know a little about this Fukuda dude. And you need to know this guy! He does lead the second largest economy on earth, is a huge US ally, and is trying to quietly change Japan’s role in an Asian situation that continues to grow in global importance every day! And from the looks of him, can party all nite and is a chick-magnet. Look at that sweet forehead man! How can the ladies resist that party animal?

Fukuda: He’s old, but not dead yet. And I hear that Viagra also sharpens your political skills…..hmmmmm….I’ve got to party with this dude.

What is happening my plaid party people? The Avenger decided to stay on here in Russia for another day to work off my wicked Putin-induced vodka martini hangover…and to investigate the nationalization of Russian oil; a process that has also been going down in Kazakhstan, in Bolivia, and in Venezuela too. And man, the US and other western countries get pissed about nationalization—they only want to hear about privatization! What’s that? You don’t recognize these terms? Well, you’ve got to know about this shit to understand the world my affable and affluent amigos! Start learning the ins and outs of economic control with these stories:

How Russia is Nationalized: The Oil Sector

Zimbabwe Votes to Take Control of Foreign-Owned Mines

Exxon pursues arbitration against Venezuela over seizure of oil assets

Chavez threatens to nationalize Venezuelan private schools

Bolivian President Seizes Gas Industry

…and the opposite side of the coin:

Japan begins privatization of its mammoth postal system

Activists Oppose Egyptian Healthcare Privatization

Iran to Privatize Airline, Banks

India’s Privatization Plan Is On Track

So what’s the deal with these two terms? They are polar opposites my friends, and folks around the planet have passionate views about the good or evil effects that nationalization or privatization can produce. People get downright hot and bothered about these terms! And in some circumstances, initiating these actions has caused political dissent, diplomatic friction, or outright violent hostilities between peoples, companies, and even countries! Damn! Why so much heat? First…what are they?

Nationalization is a process whereby a government takes control of an economic activity that was owned by and/or run by private individuals/companies hands. It could be transportation, corn, water, uranium, or even bananas…but usually it happens to high-dollar commodities. For example: Exxon acquires rights thru a government contract to pump shit tons of oil out of selected oil fields in Venezuela. Exxon goes there and sets up shop, building infrastructure like the oil wells and pipelines, and starts pumping and exporting oil. But then Hugo Chavez gets elected President of Venezuela and decides that Exxon is making too much money on that oil, and since the oil is actually in his country, he decides to take it back. All of it. So Hugo would nationalize the field, along with all the infrastructure that’s now on it, and send Exxon packing. Can you dig that?

But it never really works that simply. Even in this Venezuela/Exxon example (which actually happened) Hugo didn’t simply just kick Exxon out and take their shit; he offered to buy back their shares and their investments at a fair market value. Sometimes the parties have to go to court to negotiate these settlements (see Exxon story above). Nationalization of an industry often involves the government simply re-writing all prior contracts with the companies in such a way that the state owns more than 50% of the action. But make no bones about it: if the companies refuse to co-operate or sell back their shares, then the state will just take the shit from them!

And OMG nationalization so completely pisses off ‘the West’…especially the US! Why? Well, where do you think all the big multinational corporations are from? That’s right! Most of those companies doing business abroad (and that get their shit nationalized) are from the US/Europe. So those countries feel obliged to stick up for the rich dudes who lost their shit. Sometimes they fell so obliged that they might invade the country, or even assassinate the leader who oversaw the nationalization. Or in the case of Chavez…threaten to. Sound crazy? Yeah, it is.

So why would a state do this nationalization gig? Sometimes its done to protect a critical industry in times of war or emergency (some countries have nationalized steel during wartimes); sometimes its done because the industry is a matter of national security (Israel runs its airline industry); sometimes its done to an industry that is floundering and about to crash on its own (perhaps the US/health care issue).  But more often than not, a state will reclaim rights on an industry that it feels it’s getting ripped off in. Stick with the oil example: when Exxon or Shell or anybody else is pumping oil out of Venezuela or Nigeria, the corporation is making the lion’s share of the profits. The Avenger will just make up some numbers to help you get the point:

Let’s say a barrel of crude sells for $50 on the international market; Exxon may pay $5 to Venezuela for every barrel pumped out, thus leaving $45 for their own pockets. But people in Venezuela may say: “WTF?” “It’s oil from out country….but we only get 1/10 of the sale? That is a shitty deal!” And if enough folks in the government think that way, then they may make moves to nationalize the oil industry and rework the system to get more of the cash. Does that make sense? Venezuela did it. Russia did it. Bolivia did it. Kazakhstan is thinking about it.

Oh, by the way, did you see President Evo Morales of Bolivia on the Daily Show with John Stewart last week? Totally hilarious! And Evo referenced why he decided to nationalize his countries oil and natural gas: “On the issue of nationalization of oil and gas,” Morales said, “in 2005, before I came president, the Bolivian state received only 300 million dollars from its oil and gas exports. And now since they’ve been nationalized, the Bolivian state receives more than two billion dollars. Therefore, we followed through on what we promised.”

Are you starting to realize why this is happening at this particular juncture in history, particularly in the energy sectors? If you answered: ‘because the price of oil is freakin’ high, and expected to get even higher’ than you win the prize! Oil producing states see the future sales going nowhere but up, and want to have a bigger slice of the pie for themselves. Oil is one of those special commodities that kind of defies free market capitalism–in that lots of states control their industry as opposed to letting private individuals run the show. See map below for a few countries of note… And while die-hard capitalist countries claim that governments cannot run industries as well as private corporations, those states that are controlling their oil do seem to be making a holy shit load of cash right now…despite the fact that the private industry isn’t in charge. And speaking of private….

Privatization is precisely the opposite of nationalization: it’s when a state sells off an industry or business that it controls to a private entity, most often a company/corporation. Look to the above story from Japan for your best example of that right now: Japan sold its postal system to a private company. Wow! The whole damn post office! Why would countries sell an asset like the post office or the telecom industry? Because most free-market capitalist societies believe that private individuals and businesses simply run things better. That’s the bottom line.

The theory goes like this: because private entities are motivated to maximize profits, they will do a better job making an industry like a post office more efficient, or they will work harder to find more oil, and are more flexible to invent new technologies and try new approaches which make the business run the best. Remember: one of the golden rules of capitalism is that competition will weed out the least efficient, and the better mousetrap will win every time. Folks of this opinion believe that governments are clunky, inefficient—and because they don’t have to compete with anybody—are uncompetitive! No shit? Lack of competition makes you become uncompetitive? Yeah, I can dig that!

Places like India and China have just figured this stuff out in the last couple of decades, and are privatizing like mad right now. India has recently privatized its transportation system, its telecommunications system, and anything else it can get its hands on to sell! China too has increasingly let out the reigns on its prior control of everything economic (during its botched attempt at communism) and that place is a venerable wild west of capitalism! Even Iran is in the privatization game…and they usually despise all ideas that are western in origin. There must be something to it!

And its not like the governments simply privatize the industry and then just walk away poorer for the experience. Capitalist theory would suggest that not only does the state make money on the initial sale of the industry, but in the long run will make way more in profits by simply taking a cut of the profits and/or taxing the service/product. Since private business will do it better, there will be more oil or more uranium or more corn or more stamped letters to tax…therefore the state makes more money! And without having to actually spend money running the damn show! You dig?

Does it sound like I’m picking sides on this nationalize/privatize debate? Don’t be fooled. The Plaid Avenger is here to tell you this: this is complicated shit, and there is no wrong or right side here. It really goes on a case by case basis in my book. Does private industry typically do shit better than government-run shit? Absolutely! Are some countries getting totally reamed by some private corporations? Absolutely! Are some states unfairly grabbing shit from corporations whose time and investments made the industry profitable in the first place? Absolutely! Are some multinational corporations total scumbags who use their money and power to corrupt and control industries within a state? Ab-so-fucking-lutely!

So pay attention to which states are selling, and which states are buying, their industries. And also pay attention to which industries are up for grabs. You will hear a lot in the US about the possible nationalization of health care; in India about the privatization of telecoms; in Russia about the nationalization of the oil industry; and in Japan the privatization of the post…and now you know what that shit means, but more importantly, why it is happening…

I just hope I can still get my damn collectable Godzilla stamps in Toyko…even if it is from a private vendor…

Holy Picachu pebbles!!! Even Godzilla would shit himself over this one! Some fucking lunatic in Japan cut off his little finger, made a DvD of the butchering, and then mailed the finger and the film to the Prime Minister of Japan Shinzo Abe! What in the living hell is that all about? Well, I’m glad you asked my friends because its actually a quite important issue in modern Japan right now, for reasons which are completely ignored in the US press…but you want to be smarter than that, so check these out:

Severed pinkie sent to LDP to protest Abe’s Yasukuni no-show

Japanese prime minister skips Yasukuni visit

No Yasukuni visit for Abe, Cabinet on WWII anniversary

What the hell is so important about a shrine that it causing international consternation, internal dissent, and insane people to chop off body parts? Oh…cause its this particular shrine, perhaps the most controversial place for dead people on the planet:

Yasukuni Shrine (literally “peaceful nation shrine”) is a controversial Shinto shrine located in Tokyo that is dedicated to the spirits of soldiers who died fighting on behalf of the Japanese emperor. So what’s the problem? Every country honors its war dead, don’t they? The Yasukuni Shrine also honors a total of 1,068 convicted Japanese war criminals, including 14 executed Class A war criminals, a fact that has engendered protests in a number of neighboring countries who believe their presence indicates a failure on the part of Japan to fully atone for its military past.

The former Japanese Prime Minister Koizumi regularly visited the shrine throughout his long tenure, which consistently served to totally piss off China and South Korea . . .and perhaps even North Korea, but who knows since they are totally whack-ass insane. Why would a shrine visit piss off Korea and China you ask? Because prior to and during World War II, Japan committed all manners of war atrocities in these two countries. Hell, the Japanese essentially ran the entire country of Korea as a slave colony for over 40 years before they were defeated at the end of WWII.

Japan fucked over lots of other countries too during their era of military aggression and expansion, but the Koreans and the Chinese suffered the worst, for the longest. Therefore, it should not surprise you to hear that the leader of today’s Japan going to a shrine to honor dead soldiers really gets China and Korea all fired up. It’s the equivalent of the Germans visiting a war shrine to pay respects to Hitler and the other Nazi war dead. Sound extreme? Yep. But I call ’em like I see ’em. Can you even imagine Angela Merkel showing up to pay homage to Hitler at a cemetery? Holy shit! She would be out of office faster than sauerkraut shit through a goose!

And that brings us back to our story of the day: the current Prime Minister Abe Shinzo has decided to try to NOT piss off all of his neighbors, and has therefore declined to visit the shrine. Why would he do that? Because China and Korea are now economic powerhouses in their own right in today’s world, and Japan is not the only big boy in the neighborhood. Abe wants to improve relations as best he can to hedge his bets for security in the future. China is certainly fast becoming a global power on the order of the US…and while Japan has the US as its greatest ally, Abe figures that there is no real point in intentionally pissing off the Chinese on a regular basis.

All sorts of trade and investment go back and forth between all these Asian economic juggernauts (yes, South Korea too—they will soon join the top 10 economies on the plant; Japan and China are already #2 and #4 respectively) and no one in the Japanese leadership wants to risk economic relations. Particularly since the rapidly growing Chinese middle class is quickly becoming Japan’s biggest consumer base for all sorts of great Japanese gadgets and useless shit—like cars and video games and Pokemon shit and DvD players so they can watch a Japanese guy cut off his own finger. Oh yes! What about that freak?

Back to the fingerless freak: not everyone in Japan puts economics or global security as their highest priority, and this dude is one such person. The Japanese are a very nationalist bunch—Japan first baby! Japan number one! Yeah! Picachu kicks ass!—as are lots of folks in lots of different countries. But they do seem to take it a step further sometime…i.e. see World War Two. The dude who cut off his finger thinks the leadership is being weak and wussy by not being proud of Japan’s past. By the way, he is not totally alone either…lots of folks in Japan would espouse a belief in ethnic superiority to their Asian neighbors. Sound like racism? Yeah, it does to me too. Its no coincidence that Japan is ethnically 99% Japanese people: they don’t really allow any immigration at all, so as to keep Japan purely Japanese.

But that’s why this shit is so fascinating in today’s world: because Japan has to change. They don’t really have a choice. Their declining population is forcing them to rethink their immigration policies, and the rise of their Asian neighbors is forcing them to rethink their diplomatic policies.

And let me end with this little jewel that you otherwise wouldn’t hear about: Abe is trying to be particularly sensitive about this shrine issue, because he doesn’t want the Chinese and Koreans to feel threatened as he ramps up for the next big bombshell which is this: a big bombshell. Huh? WTF? Did I double-type? Nope. Here’s the deal: Shinzo Abe has long been a proponent to scrap the clause in the Japanese constitution that prohibits Japan from having an army and offensive weapons…the Avenger believes that he is about to make concrete moves to chuck out that clause.

And Abe is savvy: he knows that this move will cause an uproar among those same Asian countries that get pissed when anyone visits that war shrine. So he’s not visiting. He wants to be in a position that he can tell the Chinese and Koreans: “Look, we are not re-arming to replay our military past, in fact, I’m really sorry about all that WWII shit, and I’m not even visiting the shrine anymore!” Abe will say that Japan has to re-arm to counter the North Korean threat, as well as to be able to help the US in its global anti-terrorism war—which by the way he actually does really believe. And it doesn’t hurt that the US is a HUGE fan of Japan re-arming, since it will provide a counter to the growth of Chinese power in the region. But that’s a topic for another blog…..

Back to sake shots and sushi sliders. I have to ramp up for my next Pokemon battle. Picachu, don’t let me down you little bitch!

-PA